FIRST PACIFIC(HK:00142)2024-04-25 11:44Investment Interests - First Pacific Company Limited holds economic interests of 50.1% in Indofood, 25.6% in PLDT, 46.3% in MPIC, 68.8% in FPM Power, 31.2% in Philex, and 35.7% in PXP as of March 27, 2024[4]. - First Pacific's investment strategy focuses on high-growth potential assets in emerging economies, particularly in the Asia-Pacific region[3]. - The company plans to further invest in businesses with strong cash flow potential and market leadership positions[3]. - First Pacific's portfolio includes investments in PacificLight Power, Philex Mining, and PXP Energy, with a focus on energy and mining sectors[4]. Company Overview - Indofood is the largest vertically integrated food company in Indonesia and a global instant noodle brand producer, while PLDT is the leading integrated telecommunications and digital services provider in the Philippines[3]. - MPIC is a leading infrastructure investment and management company in the Philippines, with stakes in the largest power transmission, toll road, water, and healthcare companies in the country[3]. - The company is actively involved in sectors such as consumer food, telecommunications, infrastructure, and natural resources[3]. Financial Performance - Revenue for 2023 reached $10,510.7 million, an increase of 2.0% from $10,304.9 million in 2022[7]. - Net profit for 2023 was $1,341.4 million, up 27.8% compared to $1,049.6 million in 2022[7]. - Earnings attributable to shareholders increased to $501.2 million in 2023, a rise of 28.1% from $391.6 million in 2022[7]. - Operating contribution rose to $701.5 million, reflecting an 18.3% increase from $593.3 million in the previous year[7]. - The company reported a basic earnings per share of 11.82 cents, up from 9.20 cents in 2022, marking a 28.5% increase[7]. - Total assets increased to $644.87 million in 2023, compared to $600.98 million in 2022, representing a growth of 7.3%[7]. - Cash flow from operating activities improved to $40.79 million, a 22.4% increase from $33.42 million in 2022[7]. - The gross profit margin for 2023 was 32.11%, up from 29.66% in 2022, indicating a positive trend in profitability[7]. - The company’s dividend payout ratio was 20.67% in 2023, down from 23.40% in 2022, reflecting a strategic shift in capital allocation[7]. - The debt-to-equity ratio for the consolidated accounts improved to 0.73 in 2023, down from 0.82 in 2022, indicating better financial stability[7]. Sector Contributions - Indofood led the profit contribution with an operating revenue of $7.34 billion, slightly down from $7.43 billion in 2022, but still contributing $285.1 million to the group profit[30]. - PLDT's service revenue and EBITDA reached new highs, contributing $143.2 million to the group profit, reflecting growth across its three main business segments[30]. - MPIC reported record operating revenue of $1.10 billion, with a profit contribution of $159.8 million, and announced a cash dividend at a record high[30]. - PLP, a leading power supplier in Singapore, achieved record revenue and core profit, reducing its net debt by 70% and distributing $117 million in dividends[30]. Market Outlook and Strategy - The average GDP growth rate in ASEAN countries was 4.2%, with Indonesia and the Philippines showing strong growth prospects of 5.0% and 5.3% respectively for 2023[24]. - The company plans to expand its toll roads and financial technology services, indicating a focus on growth opportunities[24]. - The company remains vigilant about potential risks, including commodity price surges and geopolitical tensions, while also focusing on cost management[24]. Corporate Governance - The company has adopted a corporate governance code that includes principles and regulations outlined in the Listing Rules, with compliance noted for the year ending December 31, 2023, except for certain disclosures regarding senior management compensation[131]. - The board consists of ten directors, with five being independent non-executive directors, exceeding the requirement of at least one-third independence as per listing rules[137]. - The company has established a risk assessment committee comprising one executive director and six senior executives to oversee risk management, as it does not have a separate internal audit department[131]. - The company emphasizes a strong corporate culture that fosters collaboration and creativity, which is deemed essential for long-term sustainable performance[132]. Sustainability Initiatives - The company plans to enhance its sustainability initiatives, aiming for a 50% reduction in carbon emissions by 2030[119]. - The company is committed to enhancing its corporate governance practices, with members actively participating in relevant councils and associations[128]. Related Party Transactions - The company announced a continuation of related party transactions with the Indofood Group, effective from January 1, 2023, to December 31, 2025, covering various business sectors[182]. - The total transaction amount for related party transactions with the Indofood Group for the year ending December 31, 2023, is projected to be $178.9 million[185]. - Specific transactions include $75.9 million in palm oil sales to Shanghai Resources International Trading Co. Ltd. and $48.4 million in operational services provided to IndoInternational Green Energy Resources Pte. Ltd.[184]. Strategic Acquisitions - A strategic acquisition of a local competitor is anticipated to close by Q3 2024, which is expected to enhance operational efficiencies[119]. - The acquisition offer involves purchasing approximately 36.7% of MPIC's publicly traded common shares, with a total maximum payment of 54.8 billion pesos (approximately 986 million USD) at a price of 5.20 pesos per share[179].